Why Is So Difficult To Take Losses? | Crypto Craft

Why Is So Difficult To Take Losses? | Crypto Craft

Why Is So Difficult To Take Losses?

From insights.globalprime.com

If you get frustrated experiencing a trading loss, you are not alone. In fact, it is human nature wanting to procrastinate booking a loss. Cutting your losses in the market can easily carry negative emotions unless you learn to become a great loser. What the heck does it mean to become a great loser you may be asking? Recognizing at all times when it's time to throw in the towel as the edge no longer is present. Taking a loss is one of those things that sounds simple in theory but it can be extremely difficult to implement. That's why the right position sizing and risk management is paramount. It helps us to protect ... (full story)

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Jul 9, 2021 9:26pm

Instead of learning to become a great loser, better learn to become a great winner. Remember you do not have to manage your positions with SL in order to cut losses and protect your account.
SL = Surrender & Lose. The first thing they try to make you believe as a newbie is <<How “Important” the Stop Loss is>>. BS… that’s all I can say. It’s a BS. The markets are ranging and choppy up to 85% of the time and the big trading institutions can make any asset jumping UP and DOWN like a mad cow hunting and killing every SL found on the servers. It’s hopeless and the small retails stand no chance fighting against that. And now they want you to learn to become a great loser

What a horseshit!!!

If you want to keep the money in your account, don’t use SL. Hedge instead and learn how to solve hedges always in profit instead of learning how to become a great loser.

This may sound like teaching but it’s not. It’s a friendly professional advice. Take it or leave it.

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Jul 11, 2021 8:00am

Quoting LloydOz

Disliked

{quote} What I know is this. I have constructed and optimized many systems in Excel. SLs can easily subtract from what otherwise could have been. Its logic is incorrect if it is considered for more than a nanosecond. The better solution is to simply avoid entering trades in markets which are going through a crappy time - the 85% (I'd suggest less, actually, but it depends on many things) of the time, which is not hard using any number of techniques. Of course, once in a trade it may become a choppy market - deal with one thing at a time. My exit...

Ignored

Make it even simpler than that : Hedge in a choppy market then scale as soon as the market breaks out and makes a big trend.
1. Never use SL. Use buy/sell stops instead. This is how you keep the money in your account..
2. When breakout and trend, then scale after you put a BE on every previous position which is already in profit. This is how you will always solve your hedges and come out in profit.
3. Trade on high volatility assets and don’t be afraid of the spread.
4. Trade on assets like ERUAUD, EURJPY, GBPAUD, GBPJPY, EURNZD, GBNZD, as those are both high volatility and trending. This is what you need in order to solve your hedges easily.

That’s my system. Never failed and never trapped med since my early newbie years.
To those who want to use SL, I should say Thank You For You Money but I am not that arrogant. Instead of that I say Follow My Advice and try it on a demo for at least a couple of months before you go live. If you don’t get the desired result on demo, then you simply have to learn how to solve hedges always in profit before you go live. Hedging is really difficult to do and can be very stressing and frustrating.

The first thing that happens if you don’t hedge properly is - Your balance gets bigger, but so does your minus, which keeps your equity unchanged and even shrinking. The result of this is bigger and bigger DD every time you close some hedges. This creates trap which is very difficult to escape from. That’s why learn to hedge and learn to solve hedges in profit before you use this system.

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Jul 10, 2021 5:02am

Know the risk as well as the reward before taking any trade. If we don’t know where we are going to exit a trade, we should never get into it in the first place ...

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Jul 9, 2021 7:58pm

Most people only know how to spend money or save money, but not to manage money in the long term. Trading financial markets is a cash-on-cash activity so it's the business of business, money and finance. It has nothing to do with most of the rubbish most people go on and on about. The sooner people realize there's a real world beyond their digital screen the sooner they'll become consistently profitable and they will know how to manage "losses", be it fool's mistakes or the cost of being involved.

Peter

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Jul 9, 2021 6:56pm

Taking losses is something almost all traders find highly undesirable.

Four reasons I understand for the reluctance to take a loss are planlessness, fear, ego and greed.

When traders know not why they got in a trade in the first place, they won't know when to exit either.

Inexperienced traders have the weird fear that taking even a single small loss is like losing the entire account.

Ego consumes both experienced and inexperienced traders alike.

The greed of placing a large order size, never allows the trader exit reasonably early enough.

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Jul 11, 2021 4:45am — Edited

Quoting NotAtrader

Disliked

{quote} No, I am not. Been there long time ago and never really liked the idea. The first thing they teach people is to accept the fact that trading is a losing game and how to overcome the psychological barrier when you need to take losses instead of teaching you how to prevent those loses and showing you the way to become a successful trader. The idea of using SL and take losses sounds to me like learn how to be happy while watching your account imelting down to the last penny and you giving away your money voluntarily to the market (brokers,...

Ignored

What I know is this. I have constructed and optimized many systems in Excel.

SLs can easily subtract from what otherwise could have been. Its logic is incorrect if it is considered for more than a nanosecond.

The better solution is to simply avoid entering trades in markets which are going through a crappy time - the 85% (I'd suggest less, actually, but it depends on many things) of the time, which is not hard using any number of techniques.

Of course, once in a trade it may become a choppy market - deal with one thing at a time.

My exit points (profit and loss) are based on what the market is revealing as it unfolds, not on any pre-ordained level which might be what this whole SL rubbish is all about. So they are not "SL" - they are exit points. It might be a loss or a profit. This simplifies everything.

So, unlike other wise ones who know the future, I have absolutely no idea about anything beforehand. I have sometimes held leveraged positions for many months. Soy etc for about a year, recently.

This might be contrary to prevailing wisdom as I am led to understand it.

edit - on this whole emotional mental thing - for goodness sake, just use low leverage if possible (say, 20:1) and tiny positions. That won't make any system or methodology any better, but it will eliminate all the rubbish, counselling sessions and some pretty serious chemical substance abuse which I can only infer from many incoherent comments on some threads. Simple.

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Jul 10, 2021 7:14am

Quoting PeterCaleb

Disliked

Most people only know how to spend money or save money, but not to manage money in the long term. Trading financial markets is a cash-on-cash activity so it's the business of business, money and finance. It has nothing to do with most of the rubbish most people go on and on about. The sooner people realize there's a real world beyond their digital screen the sooner they'll become consistently profitable and they will know how to manage "losses", be it fool's mistakes or the cost of being involved. Peter

Ignored

I treat "drawdown" as "bad and doubtful debts" and keep a certain percentage aside from my trading profits as a writeoff treating it as bad debt or "equity loss". If you are not going to give your time to build skills to run a business profitably, then in the first place you should not be in that business.

Jul 10, 2021 8:24pm

Quoting LloydOz

Disliked

{quote} Are you still taking those lessons? ……… ……

Ignored

No, I am not. Been there long time ago and never really liked the idea. The first thing they teach people is to accept the fact that trading is a losing game and how to overcome the psychological barrier when you need to take losses instead of teaching you how to prevent those loses and showing you the way to become a successful trader.

The idea of using SL and take losses sounds to me like learn how to be happy while watching your account imelting down to the last penny and you giving away your money voluntarily to the market (brokers, banks, trading institutions, market makers).

The day they began teaching me how to accept losses and be happy instead of how to prevent losses and be a successful trader, was the turning point in my career as a trader.

Jul 11, 2021 9:55pm

I choose liquid assets, so I always use market orders. If I have definite plan for swing trading I will post pending orders on both sides of an support and resistance band or envelope or box.
I trade US futures and am still being able to hedge. In one of my FF posts the technique is explained.

Jul 10, 2021 6:50pm

Quoting LloydOz

Disliked

{quote} Just like when you place a bet on a horse I suppose? Or place a chip on a number at the roulette table.

Ignored

Yes, but in trading, we are responsible to determine those ourselves beforehand …

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Jul 10, 2021 12:16am

Willingness to accept a loss is needed so that you can move past it. But since the majority of retail traders have no rational reason to be profitable, they don't understand their losses [or attempt to understand them], which makes the cycle even worse.

Jul 9, 2021 5:39pm

The proper place to take losses (put SL in) is @ trend-reversal level by utilizing the “cut & flip” strategy …

Jul 10, 2021 6:12am

This is one of the most hardest things in trading. Taking a loss vs cutting them entirely before the full loss is achieved. One thing i fight on a daily basis is cutting vs leaving. I know its going bad for me but i tend to cut it before the SL is hit. Recently i took a eurstx50 long trade price moved against me by 10 pips and it happened to reverse right before my sl but it was too Late as i had already cut the position before that.

Its all about accepting full loss or cutting. Losses are a part of business but really dealing with them is hard. Its all mental

Jul 10, 2021 4:05pm — Edited

Quoting NotAtrader

Disliked

The first thing they try to make you believe as a newbie is <<How “Important” the Stop Loss is>>. BS… that’s all I can say. It’s a BS.

Ignored

Are you still taking those lessons? I'd have no idea what is taught to newbies these days. I have noticed from time to time that it is recommended to follow tips on social media, so maybe that's part of it.

Your assessment in the bit I copied here is correct, of course, in the circumstances, although I may have phrased it somewhat differently.

Jul 10, 2021 5:28pm

Reckon I might take up this meditation thing again as the author suggests. I have done it in the past (for some of the objective reasons he provides) and it takes discipline to maintain a daily routine.

Not the material with pseudo religious undertones. I did not click on the video link because he mentions Buddhism, and that is an unnecessary ingredient for meditation.

I learnt from an Aussie bloke who is a man of orthodox/Western science (a veterinarian). Some unusual stuff which comes with the territory, but I just filtered out the noise (NotAtrader has an acronym for it).

Jul 11, 2021 9:29pm

Quoting NotAtrader

Disliked

{quote} Make it even simpler than that : Hedge in a choppy market then scale as soon as the market breaks out and makes a big trend. 1. Never use SL. Use buy/sell stops instead. This is how you keep the money in your account.. 2. When breakout and trend, then scale after you put a BE on every previous position which is already in profit. This is how you will always solve your hedges and come out in profit. 3. Trade on high volatility assets and don’t be afraid of the spread. 4. Trade on assets like ERUAUD, EURJPY, GBPAUD, GBPJPY, EURNZD, GBNZD,...

Ignored

I would say for people who have access to a hedging allowed broker (Or Co-op 2x broker Hedge), this is a decent way to do things. But for me, I never ever use Stop Orders. Why? You are guaranteeing poor/bad price positioning. With a stop order, part of the instruction process of this type of entry is - "Start at price X to try and fill my order at market but IF this is not doable, for whatever known or unknown reason, I will gladly (?) accept a worse price in the favorable direction of the market movement at that associated time of the day (etc)." In trading nothing is "free" therefore, if you use Stop Orders you setup for a negative split and your hedge is inequitable for your goals. It's similar to just giving money away without any accountability. For me, I always use a positive Limit spread. And in the same fashion as you, re: choppy markets, but all of my spread limits completely pay for themselves even if the day/week etc ends sideways and then afterwards you look at it in hindsight and think it wasn't worth the margin. These are just my thoughts on this. People take from it what you will.

Peter

Jul 9, 2021 8:17pm

its one of the key things to learn

Jul 10, 2021 3:39pm

Quoting 4for4

Disliked

Know the risk as well as the reward before taking any trade.

Ignored

Just like when you place a bet on a horse I suppose? Or place a chip on a number at the roulette table.

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Jul 9, 2021 10:48am
Posted by
GlobalPrime

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